To mortgage or not to mortgage?

🤔Did you know only 32.6% of houses were bought outright in the UK? While a fortunate few may have the cash readily available, the majority of us need to explore alternative options to your everyday bank mortgage. These alternatives may include seeking assistance from family, such as the "bank of Mum & Dad" 🏧, or considering liquidating other investments. So how do you know which option is the best for you?

It's worth noting that the Baby Boomer generation, on the whole, has fared better than others financially, meaning that some homebuyers may have family members or parents willing to lend them money or offer a financial gift🎁. However, there are important considerations to keep in mind, particularly when it comes to potential tax implications. Before accepting any gifts or loans, it's crucial to understand the tax laws surrounding them. Be sure to check the guidelines provided by HM Revenue & Customs (HMRC) before receiving any gifts.

💶👪As far as loans from family goes, it's always best to make sure you put it in writing and have a solicitor review before you sign. Consider the potential consequences if you find yourself unable to repay the loan. Additionally, take into account the duration of the loan, especially if you view it as a short-term solution in response to high mortgage interest rates.

📈For those considering liquidating other investments, it's always best to build a financial model for yourself. This model should be stress-tested against worst-case, best-case, and most likely scenarios. This approach will help you assess the opportunity cost of shifting your money from one investment to another.

✅While the current mortgage rates may seem discouraging, it's essential to evaluate whether avoiding a mortgage altogether is the right financial decision for you.